Maryland's attorney general on Tuesday called for a cap on how much insurers can charge under the federal health care overhaul.
The Maryland Insurance Administration is expected to rule by next month on proposed rates for insurance plans that will be sold on the state-run health exchanges. Some of the 12 insurers' proposed rates range from a few percent less than what the same plan would cost outside of the exchange to 150 percent more than a similar nonexchange plan.
About 700,000 Marylanders are uninsured. The state expects 150,000 to enroll in a plan from the health exchange when they become available in 2014, with 275,000 enrolling by 2020.
Attorney General Doug Gansler called for the plans to be capped at no more than 5 percent more than what the same plan would cost someone who bought it outside of the health exchange.
"We need to freeze the rates for Maryland consumers and then make decisions based on the reality on the ground, not projections that serve the needs of insurance company executives," said Gansler. "Some insurance executives are threatening rate hikes of 25 percent, reaching 100 to 150 percent for some consumers, and Maryland families can't afford that."
Insurers have argued that the changes required by the Patient Protection and Affordable Care Act -- including mandatory coverage of expensive, high-risk patients and rules raising costs for younger, healthier Americans while lowering costs for older Americans in poor health -- necessitate the higher prices of plans sold on the exchange.
CareFirst BlueCross BlueShield, the largest insurer in Maryland, has proposed individual exchange plans that average 25 percent more than nonexchange counterparts. The company's proposed exchange plans for small group insurance are about 14 percent costlier than non-exchange plans.
"The attorney general is right -- the decisions on premium rates need to be based 'on the reality on the ground.' CareFirst's rate filings reflect that reality," the insurer wrote in a statement.
"Premiums closely reflect actual cost. That is essentially what CareFirst has sought to achieve in its filings and nothing more."
Gansler argued that the health care overhaul would reduce costs, making the high cost of the new plans unnecessary. He asked that the Maryland Insurance Administration cap the cost of the new plans and then examine them in six months to see if additional price increases were necessary.